85 F.

3d 1472

71 Fair Empl.Prac.Cas. (BNA) 137,

68 Empl. Prac. Dec. P 44,103
Irene P. TOMSIC and Sheila Browning, Plaintiffs-Appellants,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE
COMPANY, an Illinois
corporation; and Norman Miller, Defendants-Appellees.
No. 95-4002.

United States Court of Appeals,

Tenth Circuit.
June 7, 1996.

John S. Chindlund (James A. Boevers and Robert G. Wing with him on

the brief) of Prince, Yeates & Geldzahler, Salt Lake City, Utah, for
Plaintiffs-Appellants.
Glenn C. Hanni (David R. Nielson with him on the brief) of Strong &
Hanni, Salt Lake City, Utah, for Defendants-Appellees.
Before HENRY, HOLLOWAY, and MURPHY, Circuit Judges.
HOLLOWAY, Circuit Judge.

Plaintiffs/appellants Irene Tomsic and Sheila Browning appeal the district

court's grant of summary judgment for defendant/appellee State Farm on their
Title VII gender discrimination claims.1 Tomsic v. State Farm Mutual
Automobile Ins. Co., 870 F.Supp. 318 (D.Utah 1994). We have jurisdiction
under 28 U.S.C. 1291.

* Plaintiffs were hired on April 1, 1991, as trainee agents of defendant.2

Employment as a trainee agent is temporary, lasting at most two years.
Employees who successfully complete the training program become agents
with the defendant under a contractual relationship but are no longer
employees. Plaintiffs were terminated after about nine months in the program.

A third trainee who had been hired at the same time as plaintiffs, a male named
Toby Gonzales, was retained and successfully completed the program.
3

Under the terms of the employment contract, defendant was obligated to assign
a management employee to provide training and supervision to plaintiffs. The
supervisor assigned to train plaintiffs during the first three months of their
employment was Dean Olsen. Olsen testified in deposition that plaintiffs were
committed to the program, had good attitudes, and showed professionalism in
dealing with clients.

After three months, plaintiffs were assigned a new supervisor, Norman Miller,
who had been supervising Toby Gonzales from the beginning of his
employment. Miller devoted more of his attention to Gonzales than to
plaintiffs, according to Browning's deposition. Miller was supposed to
complete weekly progress reports on plaintiffs as well as evaluations every
three months. Miller prepared the evaluation for the initial three months of
plaintiffs' employment, even though he had not been their supervisor during
that period, and did so without the input of Olsen. Later, Miller sometimes
falsified the weekly progress reports by claiming to have spent more time in
training plaintiffs than he actually had, the plaintiffs said in their depositions.
Miller's reports on Browning were conflicting; one week she would be rated
very highly in all areas, while the next report would say she had a bad attitude
and wasn't a team player. In September 1991, Browning won a contest among
both trainees and experienced agents by submitting the highest number of life
insurance applications in her district.

Within a month after becoming plaintiffs' supervisor, Miller told plaintiff

Tomsic that he did not think she would succeed; he said her husband made too
much money and that she therefore would lack incentive. He asked about
Tomsic's marital relationship and whether her husband had ever had an affair.
At about the same time, Miller told plaintiff Browning and Toby Gonzalez that
Tomsic would be fired and one of them could have her office. Two weeks later
he again told Browning that Tomsic would be fired.

On December 16, 1991, in a tape recorded conversation, Miller told Browning

that she had a great future with State Farm but that production was not the most
important evaluation factor. He said he was concerned that she devoted so
much of her time to her career and that her personal and family life might
suffer. He also expressed concern that marital problems might arise in a few
years because she would likely be earning more than her husband. Miller later
testified that his purpose in this interview, on instructions from his superior,
was to try to convince Browning to resign voluntarily.

Three days later the decision was made to fire both plaintiffs, but apparently the
decision was not acted on immediately. Plaintiffs were asked to resign in
January. Tomsic resigned in late January. Browning refused to resign. On
February 26, 1992, a letter was mailed notifying Browning that she was
terminated as of February 29. She turned in a resignation on February 28.

The decision to fire plaintiffs was made by Mr. Lee Baumann, after receiving
the comments and recommendations of Dave Powell and Norm Miller. Brief of
Appellee at 15; Defendants' Answer, Aplt.App. at 24. Miller did not have the
actual authority to terminate a trainee. Gonzales was retained, even though his
production was not significantly better than plaintiffs', according to their
deposition testimony, and poor production was ostensibly the primary reason
for plaintiffs' termination.

II
9The District Court's Memorandum Decision and Order
10

The district court first analyzed the case according to the four elements of a
prima facie case under McDonnell Douglas Corp. v. Green, 411 U.S. 792, 93
S.Ct. 1817, 36 L.Ed.2d 668 (1973).3 The court found that plaintiffs had shown
they were members of a protected class and that issues of fact existed with
regard to the second and third elements. The court held that plaintiffs' claims
failed because they could not satisfy the fourth element, which the court
viewed as requiring plaintiffs to show that State Farm had replaced them with
individuals who were not members of the protected class. Because State Farm
had neither sought nor hired replacements, plaintiffs could not establish a prima
facie case, the judge concluded.

11

The district court then considered whether plaintiffs had shown direct evidence
of discrimination which would make it unnecessary for them to follow the
prima facie case paradigm of McDonnell Douglas. The court found that
plaintiffs had not presented direct evidence of discriminatory intent. The
statements by Miller to plaintiffs regarding their marital relationships alluded to
"arcane" notions of women's role in society, but it did not appear that Miller
himself held such views. Rather, as to the statement regarding Browning and
the possibility that she might make more money than her husband, the judge
said that Miller's concern was that such views, if held by others, might create an
obstacle to plaintiff Browning's success with State Farm.

12

As to the statement regarding Tomsic's possible lack of motivation because of

her husband's substantial earnings, the judge said that State Farm had a

legitimate concern with its trainees' incentive; it would not be in State Farm's
interest to expend resources training one whose only motivation was to "earn
pocket change." 870 F.Supp. at 324. Further, the judge concluded that plaintiffs
had failed to show that Miller's statements had anything to do with the decision
to fire plaintiffs. At most, the judge concluded, plaintiffs could argue that
discriminatory intent could be inferred from the statements, but this would not
be direct evidence of discrimination. Id. (citing Heim v. State of Utah, 8 F.3d
1541, 1547 (10th Cir.1993)).
13

Somewhat less clearly, the district judge also concluded that plaintiffs had
failed to offer sufficient evidence that defendant's proffered reasons for
discharging plaintiffs were a mere pretext for discrimination. Id. The judge's
conclusion in this portion of his memorandum follows immediately from his
conclusion that Miller's remarks did not constitute direct evidence of
discrimination; it is unclear whether he actually analyzed the issue of whether
sufficient evidence of pretext had been submitted.

III
14

* We review a grant of summary judgment de novo, applying the same

standard as the district court under Fed.R.Civ.P. 56(c). Universal Money
Centers, Inc. v. A.T. & T, 22 F.3d 1527, 1529 (10th Cir.), cert. denied, --- U.S. ---, 115 S.Ct. 655, 130 L.Ed.2d 558 (1994). Summary judgment is appropriate
if "there is no genuine issue as to any material fact and ... the moving party is
entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c). We examine the
factual record and reasonable inferences therefrom in the light most favorable to
the nonmoving party. Id. If there is no genuine issue of material fact in dispute,
we must determine whether the district court correctly applied the law. Applied
Genetics Internat'l, Inc. v. First Affiliated Securities, Inc., 912 F.2d 1238, 1241
(10th Cir.1990).

B
15

Plaintiffs contend that the district judge's conclusion that they had failed to
satisfy the fourth prong of the McDonnell Douglas prima facie case test was
erroneous because that prong as stated in that case is simply inapplicable to the
facts and circumstance of this case, which plaintiffs analogize to a failure to
promote case. Plaintiffs contend that the particular structure of their
employment, in which State Farm does not replace trainee agents who fail,
should not insulate State Farm from liability if it unlawfully discriminates in its
decisions. Plaintiffs argue that the district court failed to recognize that the
McDonnell Douglas structure was never intended to be applied rigidly but

instead should be adapted to the varying circumstances presented in particular

cases.
16

We agree that the district court erred in applying the McDonnell Douglas
framework without modification to suit the circumstances of this particular
controversy. It is not necessary that plaintiffs' claims fit neatly into a preestablished category such as wrongful termination or failure to promote. We
have previously noted the necessity of adapting the framework in the light of
the facts presented. In Cole v. Ruidoso Municipal Schools, 43 F.3d 1373, 1380
(10th Cir.1994), we described the fourth prong of the prima facie case standard
as merely requiring a showing that the plaintiff was "treated less favorably than
her male counterparts."4 In McDonnell Douglas itself the Court cautioned that
the framework for analysis would require tailoring for the particular facts of
individual cases: "The facts necessarily will vary in Title VII cases, and the
specification ... of the prima facie proof required ... is not necessarily applicable
in every respect to differing factual situations." 411 U.S. at 802 n. 13, 93 S.Ct.
at 1824 n. 13. This admonition has since been illustrated by the Court's
approach to cases such as Hishon v. King & Spalding, 467 U.S. 69, 104 S.Ct.
2229, 81 L.Ed.2d 59 (1984), in which the plaintiff brought a claim under Title
VII based on the failure of the defendant law firm to recommend her for
partnership. Chief Justice Burger, writing for a unanimous Court, there said:

17 benefit a plaintiff is denied need not be employment to fall within Title VII's
The
protection; it need only be a term, condition, or privilege of employment. It is also of
no consequence that employment as an associate necessarily ends when an associate
becomes a partner. A benefit need not accrue before a person's employment is
completed to be a term, condition, or privilege of that employment relationship. ....
Accordingly, nothing in the change in status that advancement to partnership might
entail means that partnership consideration falls outside the terms of the statute.
18

467 U.S. at 77, 104 S.Ct. at 2234-35 (emphasis in original).

19

We believe that plaintiffs' position as trainees aspiring to complete their limited

period of employment and to be rewarded thereafter with an offer to enter into a
continuing contractual relationship with State Farm as independent contractor
agents is closely analogous to the position of the plaintiff in Hishon. Hence, we
hold that plaintiffs presented sufficient evidence on the fourth element of a
prima facie case, to avoid an adverse summary judgment, by proof that they
were denied that opportunity while a similarly situated male, Gonzales, was
given the opportunity. Thus, the district court erred in holding that plaintiffs
had failed to establish a prima facie case.

20

Defendant contends, inter alia, that plaintiffs did not raise the failure to promote
theory in the district court. Plaintiffs did, however, raise this theory at argument
on defendant's motion, Aplt.App. at 261-63, without objection from defendant,
and defense counsel addressed the merits of the promotion argument, id. at
267-69. Thus, this issue is properly before us. More fundamentally, plaintiffs
assert that their argument is not that this is a failure to promote case per se, but
that analogy to failure to promote cases is instructive of the case-sensitive
approach to be taken in assessing what a Title VII plaintiff must show to
establish a prima facie case. Thus, we perceive plaintiffs' argument to be that
under the particular circumstances here, their terminations must be analyzed
with a flexible, rather than rigid, application of the McDonnell Douglas prima
facie case standard, which takes into account the fact that their employment
was of such a nature that replacements could not expect to be hired in the
normal course of defendant's business. We agree with plaintiffs on this point
and hold that the district court erred in concluding that they failed to meet the
prima facie case standard.

C
21

Plaintiffs also contend that summary judgment was improper, even if they had
failed to satisfy the prima facie case element of the McDonnell Douglas
analysis, because they presented sufficient direct evidence of discriminatory
motive in their terminations. We believe that we should resolve this issue, in
spite of our resolution of the previous issue in plaintiffs' favor, because if
plaintiffs prevail on this issue it would affect the course of proceedings on
remand. We accept plaintiffs' legal premise, as we have previously noted that
direct evidence of discrimination makes the McDonnell Douglas approach
unnecessary. See, e.g., Furr v. AT & T Technologies, Inc., 824 F.2d 1537, 1549
(10th Cir.1987). We do not agree, however, that plaintiffs' proof constitutes
direct evidence.

22

A plaintiff in an employment discrimination case proves discrimination by

direct evidence when she presents proof of "an existing policy which itself
constitutes discrimination...." Ramsey v. City and County of Denver, 907 F.2d
1004, 1008 (10th Cir.1990) (citing Trans World Airlines, Inc. v. Thurston, 469
U.S. 111, 121, 105 S.Ct. 613, 621-22, 83 L.Ed.2d 523 (1985)), cert. denied, 506
U.S. 907, 113 S.Ct. 302, 121 L.Ed.2d 225 (1992). Statements which on their
face are expressions of personal opinion, however, can only support an
inference of discrimination if the trier of fact finds the inference reasonable, and
so constitute only circumstantial or indirect evidence of discrimination against
the plaintiff. Id.

23

In contending that they presented direct evidence of discrimination, plaintiffs

rely on the remarks made by the supervisor, Miller, to the effect that Tomsic
could be expected to lack motivation because her husband earned a substantial
income, while Browning could be expected to encounter problems in her
marital relationship, which might adversely affect her performance as an agent,
because her husband would probably become uncomfortable with her earning
more than he in future years. Initially, we note the fundamental discrepancy in
defendant's position regarding Browning. She purportedly was terminated for
poor performance, yet Miller's remarks to her suggest that he must have
believed she eventually could become quite successful. We also note that the
district judge appears to have impermissibly drawn inferences from this
evidence in favor of State Farm, as he concluded that these remarks did not
actually represent Miller's personal views but only those of others with whom
Browning might have to contend. It is fundamental that the jury must be
permitted to decide from among the different inferences which might be drawn
from the evidence.

24

As to Miller's remarks to Tomsic, the district judge concluded that Miller was
only expressing a legitimate concern of State Farm that it would not be
profitable to expend company resources in training her if her only motivation
was to "earn pocket change." No evidence has been identified to us that would
suggest that Tomsic had displayed insufficient motivation. Moreover, it is again
for the jury to determine the issue of Miller's intent in making this statement.
The district judge may have been correct in his conclusion, or it may be that
Miller was displaying stereotyped views of women and of marriage which he
actually held and which may have affected his relationship with plaintiffs in
other ways. The question is not one capable of resolution on summary
judgment.

25

That said, however, we agree with the district judge that these remarks are
insufficient to constitute direct evidence of discriminatory intent in the
terminations, even though Miller's recommendation was considered in State
Farm's decisions. Although "stereotyped remarks can certainly be evidence that
gender played a part" in an employment decision, Price Waterhouse v. Hopkins,
490 U.S. 228, 251, 109 S.Ct. 1775, 1791, 104 L.Ed.2d 268 (1989) (emphasis in
original), statements such as those in issue here which "are on their face
expressions of ... personal opinion, and not an existing policy which itself
constitutes discrimination" constitute circumstantial or indirect evidence, not
direct evidence, Ramsey v. City and County of Denver, 907 F.2d 1004, 1008
(10th Cir.1990); accord EEOC v. Wiltel, Inc., 81 F.3d 1508 (10th Cir.1996);
Heim v. State of Utah, 8 F.3d 1541, 1546-47 (10th Cir.1993).5

D
26

We next consider whether plaintiffs produced sufficient evidence of pretext to

withstand defendant's summary judgment motion. Plaintiffs do not dispute that
defendant proffered a legitimate reason for requesting their resignations. Under
the McDonnell Douglas paradigm, plaintiffs must counter defendant's proffer
by presenting "enough evidence to support an inference that the employer's
reason was merely pretext, by showing either 'that a discriminatory reason more
likely motivated the employer or ... that the employer's proffered explanation is
unworthy of credence.' " Cone v. Longmont United Hospital Ass'n, 14 F.3d
526, 530 (10th Cir.1994) (quoting Texas Dept. of Community Affairs v.
Burdine, 450 U.S. 248, 256, 101 S.Ct. 1089, 1095, 67 L.Ed.2d 207 (1981)).

27

Plaintiffs contend, inter alia, that pretext could be inferred from several
circumstances shown by their evidence. First, plaintiffs point to the
inconsistency, noted previously, in Mr. Miller's statements to plaintiff
Browning concerning whether her production was the most important factor in
her evaluation. Second, plaintiffs contend that the statements by Mr. Miller
discussed above could support an inference of discriminatory intent even if, as
we have concluded, they do not constitute direct evidence of discrimination.
Third, plaintiffs cite to Miller's statements to others soon after he became
plaintiffs' supervisor that Tomsic would be fired, these conversations having
occurred several months before the decision to ask for her resignation was
actually made. Plaintiffs do not go into much detail on the significance they
attribute to these remarks, but we gather that their argument is that a
permissible inference from this evidence is that Miller had prematurely and
unfairly prejudged Tomsic solely on the basis of her gender. Fourth, plaintiffs
say that the fact that other reasons given by defendant for their discharge, such
as abrasiveness and generally poor attitudes, were totally subjective ones can
support an inference of pretext. Finally, plaintiffs suggest that the evidence is at
least sufficient that a jury could find that State Farm acted on both legitimate
and prohibited reasons, making this a "mixed motive" case similar to Price
Waterhouse v. Hopkins, 490 U.S. 228, 109 S.Ct. 1775, 104 L.Ed.2d 268
(1989), a contention which we feel we need not consider here. We agree that
these evidentiary matters raised factual issues on pretext.

28

As to the statements by Miller on which plaintiffs rely, defendant contends that

these statements were, at most, "stray remarks" of the kind found insufficient to
establish a jury question on pretext in Cone v. Longmont United Hospital
Ass'n, 14 F.3d 526 (10th Cir.1994), and Rea v. Martin Marietta Corp., 29 F.3d
1450 (10th Cir.1994). We disagree. In Cone, an Age Discrimination in
Employment Act case, we began our discussion on this point by noting that

remarks exhibiting bias which refer directly to the plaintiff may support an
inference of discrimination. 14 F.3d at 531. We said that a plaintiff must show a
nexus between the allegedly discriminatory statements and the employer's
decision. Id. We found in that case that there was no such nexus and that an
inference of bias could not be supported from the remarks there at issue for two
reasons. First, we found that one of the speakers had not been shown to have
had any role in the employment decision. Id. Second, as to a remark which was
made by one involved in the employment decision, we found that his very
general remark that "long-term employees have a diminishing return," had not
been shown to have had any connection with a discriminatory motive in
terminating the plaintiff. Id. We find significant differences in the
circumstances presented in the instant case, however.
29

The remarks at issue in this case were directed to the plaintiffs individually,
unlike the very general statements in Cone. Moreover, as we have noted,
Miller's recommendation was clearly before the decision maker, Baumann. We
believe that this is a sufficient nexus to the decision to ask for plaintiffs'
resignation; a jury could infer from Miller's remarks in the total context
presented that unlawful bias was a motivating factor in defendant's decision.6

30

In the context of the case, we also think it is significant that Miller at one
critical point offered an inconsistent explanation of his evaluation of the
performance of plaintiff Browning. As noted, on December 16, 1991, three
days before State Farm decided to ask for plaintiffs' resignations, Miller
discussed with Browning her future with State Farm. He told her in that
interview that production was not the most important criterion, a statement
inconsistent with the justification State Farm later gave for its actions. Such
inconsistencies can support an inference that the proffered reasons for
plaintiffs' discharge were pretextual. See Cole v. Ruidoso Municipal Schools,
43 F.3d at 1380. Miller was also inconsistent in his evaluations of plaintiffs, as
we have noted.

31

In short, we conclude that the district court was in error in holding that
plaintiffs had failed to produce sufficient evidence of pretext to withstand the
summary judgment motion. A jury may infer discriminatory animus from "the
simple showing of pretext," and it may find illegal discrimination upon a prima
facie case and pretext. Randle v. City of Aurora, 69 F.3d 441, 451 (10th
Cir.1995). In sum, we hold that plaintiffs produced sufficient evidence to
require submission to a jury. 7

32

Accordingly, the summary judgment is REVERSED and the case is

REMANDED for further proceedings in accord with this opinion.

At the hearing on defendant's motion for summary judgment, the plaintiffs

stipulated to dismissal of their Title VII claim against Norman Miller and to
dismissal of all claims against State Farm except the Title VII claim and a
claim for intentional infliction of emotional distress. On appeal, plaintiffs
challenge only the adverse judgment on the Title VII claim

Because we are reviewing a summary judgment in favor of defendant, we state

the facts in the light most favorable to plaintiffs

The judge stated the four elements as: (1) plaintiffs belong to a protected
group; (2) they were qualified for their jobs; (3) they were terminated despite
their qualifications; and (4) after their termination the employer hired someone
or sought applicants for plaintiffs' vacated positions whose qualifications were
no better than those of plaintiffs. 870 F.Supp. at 323

The district court did not have the benefit of Cole to guide its decision. In Cole,
however, we simply restated the requirement of the fourth prong as set out in
Rea v. Martin Marietta Corp., 29 F.3d 1450, 1454 (10th Cir.1994), a reduction
in force case which also was not stating new law

Plaintiffs also argue that summary judgment should have been denied
defendant, even if they failed to establish a prima facie case, on the basis that
plaintiffs had carried the burden of showing sufficient indirect evidence to
establish a probability that, but for the plaintiffs' status, the challenged
employment decision would have favored the plaintiffs. They rely on Notari v.
Denver Water Dept., 971 F.2d 585 (10th Cir.1992), as establishing this method
of proof as an alternative to the more familiar McDonnell Douglas framework.
Defendant in response contends that Notari was a case of reverse discrimination
and that its holding should not be applied in other contexts. Our holding that the
district court erred in concluding that plaintiffs had failed to show a prima facie
case makes it unnecessary for us to reach this alternative argument

Our analysis in Rea followed closely the analysis in Cone. Therefore,

defendant's reliance on that case is similarly misplaced

On remand, the district court will have the benefit of Randle and Cole, which
he did not have before his ruling in this case. They should be applied because of
their pertinence here